PAKISTAN has been successful in pulling off a staff-level deal with the International Monetary Fund and securing a $3 billion stand-by arrangement. Pending approval by the IMF board in July, this pact is expected to provide immediate respite to Pakistan’s acute balance-of-payments crisis and serve as a platform for opportunities for further financial support from multilateral and bilateral partners.
Reaching an agreement with the IMF was no piece of cake, as it required extensive political capital from both the civil and military leadership. Undeterred, they embarked upon a relentless diplomatic campaign in major capitals of friendly nations. However, this victory is not the end; it merely marks the beginning of another arduous undertaking — securing additional financial assistance from these friendly countries. Their demands are known, and include issues related to security and terrorism.
As Pakistan emerges from the shadow of adversity, one recalls that last year, it had successfully met another formidable challenge: getting off the menacing ‘grey list’ of the Financial Action Task Force (FATF). This achievement was the product of years of dogged determination and persistent efforts to convince the international community of its strong commitment to tightening its monetary regulations in order to prevent exploitation by terrorists and criminals.
These milestones can be seen against the backdrop of the Indian prime minister’s recent visit to the US, where discussions between US President Joe Biden and Narendra Modi led to a joint statement condemning cross-border terrorism and urging the FATF to enhance its anti-money laundering and counterterrorism financing standards. It was aimed at Pakistan which swiftly issued an official demarche to the US envoy in Islamabad.
Pakistan stands at a critical juncture where it must take transformative measures.
The strategic community in Islamabad believes that the US and its allies are employing the IMF and FATF as geopolitical tools. This perception is further bolstered by the view that Pakistan’s close strategic proximity to China and its role in Afghanistan make it an unfortunate target of coercive politics, with India emerging as the principal beneficiary.
While acknowledging the existence of such geopolitical factors, it is essential to avoid falling into the trap of victimhood that saps the nation’s energy and compromises its ability to stay the course. Externalising the issue will not yield a solution. Economists and security experts have long warned of the looming economic crisis and the ramifications of leniency towards any militant group in the country. When the consequences of policies are well known, clinging to the status quo, without making the necessary course correction, would leave little room for justifiable complaints.
Pakistan now stands at a critical juncture where it must harness its resilience and determination to not only navigate the challenges imposed by global politics but also take transformative measures to ensure long-term solutions.
The allegation of militants infiltrating India-held Kashmir from Pakistan lacks substance. Pakistan has successfully subdued militant groups in compliance with FATF. Major groups, like the Jamaatud Dawa and Lashkar-e-Taiba, are having an internal debate but are unwilling go to public with it due to their mistrust of and fear of exploitation by India. Friendly nations also have concerns about militant groups and extremism in Pakistan.
The way out for Pakistan is obvious. The institutions should focus on countering terrorism financing and fulfilling international obligations. Efforts to neutralise the militant infrastructure should prioritise core national interests — and any temptation to use them for internal politics must be avoided. Pakistan has established mechanisms to check the illicit financial flows under FATF compliance. Effective oversight from parliament and legislative cover will increase legitimacy and gain international trust.
In the grand tapestry of global affairs, the presence of strong institutions to combat illicit financing is not merely a matter of international trust, but a crucial factor in maintaining geopolitical equilibrium. Recognising the significance of this paradigm, Pakistan must strategically position itself as a member of esteemed international bodies, such as the FATF, to bolster its influence on the geopolitical stage.
Becoming a FATF member calls for heightened responsibility. A few nations currently find themselves on the FATF’s grey list, and are subject to scrutiny by this international watchdog. However, for Pakistan, membership promises to arm it with the necessary tools to deftly navigate the intricate web of diplomatic and political challenges thrust upon it by formidable forces such as India, the US and others.
To secure this coveted position within the FATF, Pakistan has earnestly attempted to meet the watchdog body’s stringent criteria and elevate its standards. The FATF places particular emphasis on fostering transparency, understanding beneficial ownership, and ensuring that criminals are unable to conceal their nefarious activities behind a veil of opaque corporate structures.
In the journey towards membership, Pakistan’s inclusion lies in the hands of member countries engaged in the intricate process of mutual evaluation. It is within this evaluative framework that the final verdict will be rendered, determining Pakistan’s destiny in the ranks of the world’s foremost financial warriors.
However, lurking in Pakistan’s geopolitical landscape is a formidable challenge, one that tarnishes its global image and threatens its strategic interests. This challenge emanates from the terrorist groups operating across the Afghan border.
Even as Pakistan navigates the complex web of relations with the Afghan Taliban regime, the nation steadfastly supports its regime. On the other side, the Taliban, in their unwavering stance, continue to lend support to the Tehreek-i-Taliban Pakistan. Rumours of resettlement initiatives for families of TTP fighters may echo in distant lands, but the reality is that any such endeavour would only augment the TTP’s sinister capacity for terror. In the absence of fear that had resulted from the relentless retaliatory strikes by Pakistan previously, the TTP grows bolder, its actions unchecked, and its violence unrestrained as it casts aside all considerations for the collateral damage that might befall its kin.
The TTP is sowing chaos and seeks to line its pockets through extortion and other illicit means. In the quest for geopolitical equilibrium and the coveted membership of the FATF, Pakistan has to review its counterterrorism policies.
The writer is a security analyst.
Published in Dawn, July 2nd, 2023